A budget compromise

Public Education

• $225 million cut for grades 4-12 with local officials deciding how to cut without changing the average class size for grades K-3
• $48 million cut by delaying math textbook purchases in grades 6-12. Next year: moratorium on all new textbooks expected (will save $115.4 million)
• $38.3 million cut by eliminating funding to help students who perform poorly on certain statewide tests
• $12 million cut by eliminating 200 literacy coaches

Community colleges/higher education

• $14 million cut, but does not affect programs involving retraining unemployed workers
• $72.9 million cut for universities by targeting senior & middle management, centers and institutes, low-enrollment degree programs, faculty workload, speaker series and institutional trust fund
• In-state & out-of-state tuition increased by either $200 or 8%, whichever is the lower amount, at all UNC institutions (will raise $34.8 million)
• Reduce funding to university centers & institutes by $13.7 million for specific campuses

Health and human services

• $12.9 million cut - eliminated 350 positions within the Division of Mental Health, Developmental Disabilities and Substance Abuse Services
• Reduced funding for local mental health, substance abuse and physical disability service providers by $40 million
• Reduce funding to help counties administer public assistance programs by $5.5 million

Natural and economic resources

• Eliminate 70 vacant positions in the Dept. of Environment and Natural Resources (will save $3.4 million)
• Clean Water Management Trust Fund will be cut by $50 million each year for 2 years
• Dept. of Commerce must sell the state's King Air plane and reduce all costs associated with operating it, including a pilot position, to save $148,000 this year and $296,000 next year

Justice and public safety

• Eliminate 187 Department of Correction positions by cutting $8.1 million
• Close 7 small prisons (will save $8.4 million this year and $22.3 million next year)
• Increase SBI Crime Lab fee assessed on convicted criminals from $300 to $600. Impaired-driving cases make up the bulk of the money generated by the fee. (will raise $195,000 year this year)
• Cut $4.8 million by eliminating 27 work crews that provided free labor to state and local governments

Taxes

• Individual income surcharge of 2% on married couples whose taxable income is between $100,000 and $250,000 and 3% on married couples with a taxable income of $250,000. (will raise $172.8 million)
• 3% surcharge on the profit tax paid by corporations (will raise $23.1 million)
• 1 cent sales tax increase (will raise $803.5 million)
• Sales tax on digital downloads and Internet purchases (will raise $11.8 million)
• 10 cents tax for cigarettes, 2.8% tax increase for other tobacco products, 5 cents tax increase for a six-pack of beer, 4 cents tax for a bottle of wine and 5% more per bottle of liquor (will raise $68.8 million)

Fees

• Marriage license fee increase from $50 to $60
• Bail bondsmen license increase from $100 to $200
• Fees paid by HMOs to operate increase from $250 to $500
• Child care licensing fees increase from $35 to $52 for small operations and from $400 to $600 for the largest facilities
• Convicted criminals who have a court-appointed lawyer will be charged a $50 appointment fee
• Defendants who fail to appear at court will pay $200 instead of $100
• Convicted criminals whose cases included SBI Lab testing would have to pay $600

News & Observer

Inching closer to a budget

Tax Deal

House and Senate negotiators have pushed the ball forward again on a tax deal, nearing an agreement that could end a budget stalemate that has now lasted nearly a month into the fiscal year. "We're close, but we're trying to work on the details to get to the $990 million," said Sen. David Hoyle, D-Gaston. Hoyle indicated that House and Senate Democrats had decided against trying to placate Gov. Beverly Perdue by raising even more taxes to restore public school cuts. Legislative leaders had met Wednesday morning with Perdue, and negotiators said that she had been involved in the most recent talks.

Perdue helped scuttle a deal on taxes last week, criticizing legislators for applying an income tax surcharge to all taxpayers with income tax liability.

She also called for more revenue, money that might have gone to restore teaching position cuts in grades 4-12. Legislators seemed to be heeding the criticism about the income tax surcharge. Sources indicated that the deal being considered could put the income threshold at $100,000 before the surcharge applies. Instead of a 2-percent surcharge, the rate may be raised to 3 percent in order to hit the revenue target. Beyond those changes, House Democrats indicated the proposal isn't vastly different than the agreement which fell through last week.

That plan included an additional 1-cent sales tax and increases on cigarette, beer, wine and alcohol taxes. The two sides are also considering a special session this fall to examine comprehensive tax reform, apparently as a part of the deal, sources said. Democrats in both chambers emerged from closed-door caucuses late Wednesday sounding optimistic that they would reach a final, lasting agreement on a tax plan. As House Democrats completed their caucus meeting, negotiators from the House and Senate immediately began huddling in a nearby office. "We gathered feedback in the caucus,"

said Rep. Paul Luebke, D-Durham, a co-chair of the House Finance Committee.

"We just have some details to work out."(THE INSIDER, 7/30/09).

Patterson Grange

On Tuesday night I visited Patterson Grange in Rowan County! We ate dinner and it was awesome... as always. Over dinner the conversation turned toward politics and it was so great to hear how a few Grangers called their Congressman about an issue they were concerned about. Way to get involved & have a voice! After dinner we moved into the meeting area where I gave a presentation on the budget, mostly on the issue of education within the budget. I told them that I was there to update them what the General Assembly is doing... or rather what they're not doing. I wished that I could have given them a better update on the budget, but I wasn't able to.

If your Grange would like a copy of this presentation, please let me know.

Are we close to having a state budget?

House and Senate budget negotiators say they are close to reaching a deal to raise nearly $1 billion in order to balance a $19 billion state budget. But the two sides concluded negotiations on Tuesday without agreement on some important details, one of them exactly how much to raise sale taxes. An obstacle that may loom even larger: Reluctance by some key House Democrats to agree to any increase in cigarette taxes. [The North Carolina State Grange has opposed the increase in cigarette taxes because the tobacco industry has been hit extremely hard this year with an increase in the federal tobacco tax, FDA regulation of tobacco & the passage of stringent smoking laws in the state and tobacco growers shouldn't be forced to bear any more of the burden of the budget crunch than they're already experiencing] Even so, Democratic leaders said the two sides have made substantial progress and agreed in principle to the broad strokes of the plan. "We still have a lot of options," House Speaker Joe Hackney said after emerging from a closed-door caucus meeting in which House Democrats discussed the proposal. "We're closer than we've ever been," he added. After another round of evening negotiations, chairs of the House and Senate finance committees said more caucus meetings and negotiations would be needed to reach agreement on final details. "We're very optimistic we will conclude this week," said Sen. David Hoyle, D-Gaston.

The agreement calls for a 3/4 cent increase in the state sales tax, which could rise to 1 cent if House Democrats reject an increase on the tax on electricity sales. The plan would also impose a 2% surcharge on personal and corporate income tax liability, meaning an individual owning $1,000 in income taxes would see their bill rise by $20. That tax, unlike others in the place, would be temporary, expiring in two years. So-called sin taxes -- excise taxes on alcohol and cigarettes -- would also rise. No sales taxes on services, which had been large part of a Senate tax plan and a smaller part of a House plan, are included in the latest proposal. Rep. Paul Luebke, D-Durham, a co-chair of the House Finance Committee, acknowledged that a cigarette tax hike, historically opposed by rural Democrats, again had its critics. "There are members of the House caucus that are having a problem with even a small increase in the cigarette tax," Luebke said. [The North Carolina State Grange has communicated its concerns with members of both the House and Senate Appropriations Committees.] Hackney could be seen talking to one of those rural Democrats, Rep. Dewey Hill, D-Columbus, after leaving the caucus meeting and heading to the House floor. The proposal being considered would raise cigarette taxes as much as 15 cents per pack.

But just as in the other areas, Senate negotiators apparently are willing to make tradeoffs if that amount is lowered. In thise case, lowing the cigarette tax hike could mean increasing the hikes on beer, wine and liquor, all in order to hit a set target as part of a $990 million overall tax increase. The proposal also ties an overall sales tax hike of 3/4 of a cent to an increase in the sales tax in electricity. If the electricity sales tax doesn't rise from the current 3% rate, the overall sales tax could rise even more, to 1 penny, to make up the difference. Senate Democrats planned to caucus this morning to discuss where the negotiations stand. House Democrats were likely to meet around lunchtime. Legislative Republicans, meanwhile, criticized both Democrats' inability to reach an agreement and their focus on new taxes. Senate Minority Leader Phil Berger, R-Rockingham, said Democrats weren't engaged in a high-minded debate about reforming the tax code but trying to do the lease damage to their political futures. (THE INSIDER, 7/22/09).

Dear Governor Perdue,

You are cordially invited to comment on the House and Senate budget proposals.

Sincerely, House Republicans

Governor Perdue has been invited to be more vocal on the House and Budget proposals through a resolution that was filed June 22. "It sends a message that in this time of severe crisis that more hands on deck, more minds toward the problem is the best possible solution," said Rep. Dale Folwell, R-Forsyth, and co-sponsor of the resolution. "The House balanced its budget with a combinatin of regressive taxes and taxes that make North Carolina a more expensive place in which to live and work," the resolution states.

When the House was debating the budget, Republicans praised the Governor's budget proposal and particularly her plan to only budget jobs that were filled. "I just don't believe the Governor of our state would propose something nonsensical," Rep. John Blust, R-Guilford, said during the budget debate.

Perdue has been holding rallies around the state in support for tax hikes to preserve education.

Budget Conference Committee

Conference committees are put together when there is disagreement on a bill. These committees have members from both the House and the Senate and they will emerge with a bill that both chambers can be satisfied with. A conference committee is put together when dealing with the state budget. The members of this committee are:

SENATE
Linda Garrou - Forsyth - Co-Chair
Charlie Albertson - Duplin, Lenoir, Sampson - Co-Chair
Charlie Smith Dannelly - Mecklenburg - Co-Chair
A.B. Swindell - Nash, Wilson - Co-Chair
Bob Atwater - Chatham
Doug Berger - Franklin, Granville, Vance, Warren
Stan Bingham - Davidson
Dan Blue - Wake
Julia Boseman - New Hanover
Daniel G. Clodfelter - Mecklenburg
Don Davis - Greene, Pitt, Wayne
Katie G. Dorsett - Guilford
Tony Foriest - Alamance, Caswell
Steve Goss - Ashe, Watauga, Alexander, Wilkes
Malcolm Graham - Mecklenburg
Fletcher L. Harstsell, Jr. - Cabarrus
David W. Hoyle - Gaston
Clark Jenkins - Edgecombe, Martin, Pitt
Ed Jones - Bertie, Chowan, Gates, Halifax, Hertford, Northampton, Perquimans
Eleanor Kinnaird - Orange, Person
Floyd B. McKissick, Jr.- Durham
Martin L. Nesbitt, Jr. - Buncombe
William R. Purcell - Anson, Richmond, Scotland, Stanly
Joe Sam Queen - Avery, Haywood, Madison, McDowell, Mitchell, Yancey
Tony Rand - Cumberland, Bladen
Larry Shaw - Cumberland
John Snow - Cherokee, Clay, Graham, Haywood, Jackson, Macon, Swain, Transylvania
R.C. Soles, Jr. - Brunswick, Columbus, Pender
Josh Stein - Wake
Richard Stevens - Wake
Don Vaughan - Guilford
David F. Weinstein - Robeson, Hoke

HOUSE
Mickey Michaux - Durham - Chair
Alma Adams - Guilford - Chair
Martha Alexander - Mecklenburg - Chair
Jim Crawford - Granville, Vance - Chair
Phillip Haire - Haywood, Jackson, Macon, Swain - Chair
Maggie Jeffus - Guilford - Chair
Joe Tolson - Edgecombe, Wilson - Chair
Douglas Yongue - Hoke, Robeson, Scotland
Paul Luebke - Guilford - Chair
Pryor Gibson - Anson, Union - Chair
William Wainwright - Craven, Lenoir - Chair
Jennifer Weiss - Wake - Chair
Hugh Holliman - Davidson - Chair
Bill Owens - Camden, Currituck, Tyrrell, Pasquotank - Chair
Bruce Goforth - Buncombe
Larry Womble - Forsyth
Deborah Ross - Wake
Robert Grady - Onslow
Rick Glazier - Cumberland
Ray Rapp - Haywood, Madison, Yancey
Marian McLawhorn - Pitt
Larry Bell - Sampson, Wayne
Marvin Lucas - Cumberland
Earline Parmon - Forsyth
Cullie Tarleton - Ashe, Watauga
Laura Wiley - Guilford
Susan Fisher - Buncombe
Alice Graham Underhill - Craven, Pamlico
Russell Tucker - Duplin, Onslow
Jane Whilden - Buncombe
Elmer Floyd - Cumblerland
Fred Steen - Rowan
Beverly Earle - Mecklenburg
Bob England - Cleveland, Rutherford
Verla Insko - Orange
Jean Farmer-Butterfield - Edgecombe, Wilson
William Brisson - Bladen, Cumberland
Randy Stewart - Nash
Jeff Barnhart - Cabarrus
Alice Bordsen - Alamance
Jimmy Love - Harnett, Lee
Tim Spear - Chowan, Dare, Robeson, Hyde
Ronnie Sutton - Robeson
Ray Warren - Alexander, Catawba
Melanie Wade Goodwin - Montgomery, Richmond
Darren Jackson - Wake
Annie Mobley - Bertie, Gates, Hertford, Perquimans
Tim Moore - Cleveland
Pricey Harrison - Guilford
Garland Pierce - Hoke, Robeson, Scotland
Edith Warren - Martin, Pitt
Winkie Wilkins - Durham, Person
Michael Wray - Northampton, Vance, Warren
Angela Bryant - Halifax, Nash
Carolyn Justice - New Hanover, Pender
Nelson Cole - Rockingham
Grier Martin - Wake
Lucy Allen - Franklin, Halifax, Nash
Lorene Coates - Rowan
Ty Harrell - Wake
Margaret Dickson - Cumberland
Nick Mackey - Mecklenburg
Phillip Frye - Avery, Caldwell, Mitchell, Yancey

State Budget

ASSOCIATED PRESS:

The House gave final approval early Saturday to an $18.6 billion state budget proposal that includes more than $780 million in new taxes, clearing the way for negotiations to begin with the Senate on a compromise plan. The bill passed on a largely party-line vote of 64-53 following a three-hour debate. Democrats who drew up the House plan called it a balanced approach to handle the state's worst fiscal situation in a generation: more than $2 billion in cuts, combined with the taxes and federal stimulus money. "With the new revenues focused squarely on education and helping those who genuinely need our help, we have avoided the worst of the cuts," said House Speaker Joe Hackney, D-Orange. The House tax package would raise the sales tax by a quarter-penny so that most residents would pay 7 percent. It would also add two new marginal income tax rates for the wealthy and create or raise taxes on liquor, movies and digital downloads.

Passage of the House plan allows Democrats in the House and Senate to begin negotiating a final two-year spending plan in earnest this week. The Senate passed a budget bill in April. Senate Democrats are lobbying hard for their own tax package that would raise more revenues but change dramatically sales and income taxes and lower their rates. Democratic Gov. Beverly Perdue wants to have input on the bill, and wants it ready to sign before the new fiscal year begins July 1. But that deadline may be hard to meet. "I'm expecting it to be a long process," said Rep. Mickey Michaux, D-Durham, senior co-chairman of the House Appropriations Committee. "I'm hoping that it's not."

The competing House and Senate plans are far apart in sheer size, the result of the Senate drawing up its proposal weeks before lawmakers were told dwindling tax collections had deepened the budget hole by $1.5 billion.

Michaux said a key fight in negotiations may center on the University of North Carolina system, which historically has had strong allies in the Senate. Despite the differences in the plans, some cuts were in both proposals and appear likely to make it into the final budget. They include:

* Elimination of funding to pay salaries for 3,400-6,000 public

schoolteachers as average class sizes are increased.

* Elimination of an undetermined number of vacant and filled jobs

within state government. Remaining employees should expect no pay raises, and furloughs are possible.

* Coverage reductions for Medicaid patients and frozen or decreased

payments for doctors who treat them.

* Closing of several prisons.

Lawmakers acknowledged that any tax hikes carry political risks. "A lot of folks in my area that contacted me, they couldn't afford additional taxes at this time," said Rep. Van Braxton of Lenoir County, one of two Democrats who voted with Republicans in opposing the House budget bill. And raising income tax rates that are already the highest in the southeastern U.S. may be a deal-breaker for some Democratic senators who believe it would discourage companies from moving to the state. The rate was raised temporarily in 2001 but didn't expire for six years. "I'll never vote for that - ever, never,"

said Sen. David Hoyle, D-Gaston, one of the authors of the Senate tax plan.

Republicans, who are in the minority in both chambers, have argued unsuccessfully the budget could be balanced without new taxes that would delay the economy's recovery. "I am convinced there are hundreds of millions of dollars in cuts that wouldn't harm citizens," said House Minority Whip Thom Tillis, R-Mecklenburg.

House Budget - NCDA

On May 22, Commissioner of Agriculture, Steve Troxler, sent a letter to those involved in agriculture and referenced the House Budget being worked out in Subcommittees at the NC legislature. The House Natural and Economic Resources Appropriations Subcommittee released a document [e-mail me at aefowler@ncgrange.com for a copy] which outlines proposed cuts to the Department of Agriculture & Consumer Services' budget for the upcoming biennium.

The document that was presented contains $5.7 million in options for member consideration - of which members will be considering approximately $4 million (6%) for inclusion in their budget. Reductions to the Department and other agencies must total $43.5 million from the Natural and Economic Resources Continuation Budget (spending $34.3 million less than the Senate budget).

WHAT ARE WE CONCERNED ABOUT??
The Subcommittee has proposed eliminating the Agricultural Review which is the Department's newsletter that first began in 1914. The Ag Review has informed the public about North Carolina agriculture and the work of the Department of Agriculture. The paper also provides a forum for commerce through the free classified advertisements for farm-related items (equipment, supplies, farmland, farm animals and other agricultural items). An issue usually contains 1,000-1,200 classified ads which provides farmers a no-cost forum to sell these items. The total value of items, land and animals advertise for sale in the October 2008 issue was more than $17 million. Farms gain extra income through services and products sold through the Ag Review. Cooperative Extension agents and farm organizations use the publication as an outlet for publicizing their events such as field days, seminars, workshops, and horse and livestock events. Many subscribers do not have Internet access and the hard-copy publication serves them well. The cost of publishing the Ag Review (labor, printing, postage) is 32 cents per copy.

"The Ag Review's classifieds have one superb, although quite intangible value, and that is that they make the peanut farmer in Murfeesboro and the apple grower in Brevard feel like next-door neighbors. ... No other publication in the state can achieve that." (J.A.C. Dunn, Winston-Salem Journal, April 15, 1982)

The House Subcommittees are to finish their work by June 4th and the House are to vote on the full budget by June 18th.

Comments to the Subcommittee are encouraged!!!
Chairman: Pricey Harrison - Guilford
Chairman: Garland E. Pierce - Hoke, Robeson, Scotland
Chairman: Edith D. Warren - Martin, Pitt
Vice Chairman: Carolyn H. Justice - New Hanover, Pender
Vice Chairman: W.A. "Winkie" Wilkins - Durham, Person
Vice Chairman: Michael H. Wray - Northampton, Vance, Warren
Member: Angela Bryant - Halifax, Nash
Member: James H. Langdon - Johnston, Sampson
Member: Efton Sager - Wayne
Member: Ruth Samuelson - Mecklenburg
Member: Roger West - Cherokee, Clay, Graham, Macon

State Budget Crunch

Perdue says slash more

Agency heads told to cut 9 percent

Rob Christensen - Staff Writer

Published: Thu, Feb. 26, 2009 12:30AM

Modified Thu, Feb. 26, 2009 05:34AM

Gov. Beverly Perdue on Wednesday ordered deeper cuts in state government, a move that could potentially jeopardize such North Carolina icons as "The Lost Colony" outdoor drama in Manteo and the High Point Furniture Market.

Taking steps to manage North Carolina's growing budget crisis, Perdue asked state agencies to reduce their budgets this year by as much as 9 percent. Last month, Perdue had asked for 7 percent cuts.

To help keep the state out of the red, Perdue also said she would dip into various special funds for $300 million that had been reserved for school construction, textbooks purchases and water and sewer projects.

"The state constitution requires that I balance the state budget," Perdue, a Democrat, said in a statement, "and I will do that while protecting public education as much as possible."

The move was described as necessary by other state leaders.

"It's going to get worse," said Senate leader Marc Basnight, a Manteo Democrat. "She is moving to 9 percent. She will have to go higher. We are in a major, major economic crisis. It's affecting the vast majority of North Carolinians. The government needs to respond and do so quickly."

In asking for deeper cuts, Perdue did not specify which programs are on the chopping block.

But her office released a list of some of the programs that her budget office is considering for cuts.

Those include seven smaller and older state prisons, eliminating inmate road crews, cutting out the Capitol Police investigative unit, ending state funding for "The Lost Colony" and the Shakespeare Festival, ending state funding for the High Point Furniture Market, eliminating the Labor Department's apprenticeship program and ending state meat and poultry inspection programs.

The Lost Colony is one of the cultural jewels in the district represented by Basnight. But he said it was fair to consider "The Lost Colony" along with other state programs.

"It definitely says the situation is getting worse," said Elaine Mejia, a budget analyst with the N.C. Budget and Tax Center. "A 9 percent cut is really significant. You're approaching the point where you will see real reductions in services and layoffs of employees."

As a precautionary step, Perdue said she would transfer up to $300 million from several special accounts into the state's General Fund. Those are $100 million from the Clean Water Management Trust Fund, $100 million from the Public School Building Capital Fund, $50 million from the Public School Text Book Fund and $50 million from the lottery reserve fund.

June Atkinson, the state superintendent of public instruction, said she agreed with the steps.

"I think the action she took today illustrates what a dire place we are in," Atkinson said. "It is more important to pay the salaries of teachers and others. With textbooks and constructions, those purchases can be deferred to another time."